Custom, Excise & Service Tax Tribunal
Pioneer Bricks Pvt Ltd vs Ludhiana on 24 June, 2024
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
CHANDIGARH
REGIONAL BENCH - COURT NO. I
Excise Appeal No. 50305 of 2014
[Arising out of Order-in-Original No. 70/CE/CHD-II/2013 dated 25.10.2013 passed
by the Commissioner of Central Excise, Chandigarh-II]
Pioneer Bricks Pvt Ltd ......Appellant
Village Bahadurgarh, Derabassi,
S.A.S. Nagar (Mohali), Punjab
VERSUS
Commissioner of Central Excise, ......Respondent
Chandigarh-II Central Revenue Building, Plot No. 19, Sector 17C, Chandigarh 160017 WITH
(i) Excise Appeal No. 59426 of 2013 (Pioneer Bricks Pvt Ltd) [Arising out of Order-in-Appeal No. 200/CE/APPL/CHD-II/2013 dated 22.05.2013 passed by the Commissioner (Appeals), Central Excise, Chandigarh-II]
(ii) Excise Appeal No. 53902 of 2014 (Pioneer Bricks Pvt Ltd) [Arising out of Order-in-Original No. 30-31/CE/CHD-II/2014 dated 06.05.2014 passed by the Commissioner, Central Excise, Chandigarh-II]
(iii) Excise Appeal No. 50637 of 2015 (Pioneer Bricks Pvt Ltd) [Arising out of Order-in-Original No. 04/CE/CHD-II/2015 dated 16.01.2015 passed by the Commissioner, Central Excise, Chandigarh-II] APPEARANCE:
Present for the Appellant: Ms. Kanika Malhotra, Advocate Present for the Respondent: Sh. Anurag Kumar & Sh. Harish Kapoor, Authorized Representatives CORAM:
HON'BLE Sh. S. S. GARG, MEMBER (JUDICIAL) HON'BLE Sh. P. ANJANI KUMAR, MEMBER (TECHNICAL)
2 E/59426/2013, E/50305/2014, E/53902/2014, E/50637/2015 FINAL ORDER NO. 60376-60379/2024 DATE OF HEARING: 24.06.2024 DATE OF DECISION: 24.06.2024 PER : S. S. GARG These four appeals are directed against different impugned orders passed by the Commissioner of Central Excise & Commissioner (Appeals) of Central Excise, Chandigarh-II, whereby the adjudicating authority & appellate authority confirmed the demand of duty along with equivalent penalty. The details of all four appeals are given herein below:
Sl. Appeal No. Relevant Date of Duty Penalty No. Period SCN Demanded (in Rs.) (in Rs.)
1. E/59426/2013 01.04.2010 18.03.2011 2,08,645/- 2,08,645/-
to 28.02.2011
2. E/50305/2014 01.12.2011 17.12.2012 50,43,253/- 50,43,253/-
to 30.09.2012
3. E/53902/2014 March 2011 05.03.2012 1,10,828/- 1,10,828/-
to
November
2011 & & & &
October 09.10.2013 52,34,799/- 52,34,799/-
2012 to
June 2013
4. E/50637/2015 01.07.2013 28.07.2014 70,56,210/- 70,56,210/-
to
30.04.2014
3 E/59426/2013, E/50305/2014,
E/53902/2014, E/50637/2015
Since the issues involved in all these appeals are identical, therefore, all the four appeals are taken up together for discussion and decision. For the sake of convenience, the facts of the Appeal No. E/50305/2014 are being taken as a lead case.
2.1 Briefly stated facts of the case are that the appellant are engaged in manufacture of burnt clay bricks and tiles, both manually and mechanically out of locally available clay since 1991. The manufacturing processes are as under:
Digging clay from agricultural land and dumping it near brick kiln. The clay is mixed with water, kneaded and put into moulds of specific shape and design to acquire the resultant product i.e. brick/tile etc. The moulding is done manually and/or through machines. The clay is fed into brick/tile machine using belt conveyors, which is loaded by manual labour. The bricks/tiles are prepared with the brick machine by pressing into moulds. The bricks/tiles coming out of machine moulds are kept in open shed for semi drying.
The bricks/tiles manually and/or made mechanically are shifted to brick kiln. Firing in the kiln is done directly with coal which is used in the brick kiln and peak temperature range from 900°c to 1080°c and are maintained for 24 hrs and thereafter gradually reduced. The bricks/tiles are kept in kiln for 7 to 8 days. The bricks/tiles are taken out of kiln 4 E/59426/2013, E/50305/2014, E/53902/2014, E/50637/2015 manually in wheel barrow carts. After sorting the bricks/tiles are stacked for sale. Even the brick kiln licence issued to appellant states "a brick is a geometrical shape of clay fired in a kiln".
The product emerge also known as burnt clay bricks/tiles. The burnt clay products manufactured are bricks, roofing tiles, pavers, terrace tile etc and are used for construction purposes. 2.2 The appellant are manufacturing normal construction bricks. The appellant were issued license to manufacture, sell or supply bricks at Village Bahadurgarh, Derabassi under Punjab Control of Bricks Supplies, Price and Distribution Control Order, 1998. The Derabassi Brick Kiln Owners Association vide certificate dt. 10.05.2013 certified that appellant were established in the year 1990 and ever since are the member of Brick Kiln Association and are involved in making bricks and tiles at their brick kiln using locally available brick clay and these are fired with coal in the kiln. The appellant have also accordingly installed the machinery for manufacturing bricks/tiles. The coal fed kilns are used by appellant and its temperature ranges from 900°c to 1080°c. The bricks/tiles are made from clay burning at high temperature. The bricks/tiles manufactured by the appellant are burnt clay product and ceramic tiles. The department is of the view that the impugned goods manufactured by the appellant are unglazed ceramic wall tiles classifiable under sub-heading 6907 10 90 of Central Excise Tariff 5 E/59426/2013, E/50305/2014, E/53902/2014, E/50637/2015 Act, 1985, while the claim of the appellant is that their product is burnt clay building bricks/tiles falling under heading 6904 10 00 & Roofing tiles tall under heading 6905 10 00 of Central Excise Tariff Act, 1985. Hence, the present appeals.
3. Heard both the parties and perused the material on record. 4.1 The learned Counsel for the appellant submits that the impugned orders are not sustainable in law and are liable to be set aside, as the same have been passed without properly appreciating the facts and the law; and binding judicial precedents on the identical issues.
4.2 She further submits that the Adjudicating Authority erred in holding that processes undertaken by appellant are akin to process mentioned in chapter 69 of HSN and it is incorrect to hold that burnt clay tiles manufactured by appellant are unglazed ceramic wall tiles classifiable under sub-heading 6907 10 90 and chargeable to duty. 4.3 She also submits that the Adjudicating Authority has failed to appreciate the manufacturing processes of ceramic tiles furnished by appellant. The manufacturing processes of ceramic tiles are quite complex because of wide range of raw-materials and high-tech machineries required, whereas the machines used by appellant are of very low pressure mechanical machines. Ceramic tiles cannot be made by these mechanical brick machines. The materials used by appellant have to lie for days in the shed to shed their moisture content before being able to be hand handled and hand fed to the kiln 6 E/59426/2013, E/50305/2014, E/53902/2014, E/50637/2015 unlike the ceramic tiles which go directly and mechanically in the firing chambers because of low water absorption. 4.4 She further submits that in order to prove their submissions, the appellant furnished expert's opinion to the Adjudicating Authority, but the same has not been considered.
4.5 She also submits that the Adjudicating Authority has failed to appreciate that classification of the product under Chapter 69 is determined according to the composition of material used, their shape, size and the firing process adopted.
4.6 She further submits that the Adjudicating Authority has failed to appreciate the difference between ceramic tiles and burnt clay tiles. The Adjudicating Authority has failed to appreciate that impugned goods are commercially known as building bricks/tiles, roofing tiles and are sold in the trade as bricks/tiles, roofing tiles and not ceramic tiles.
4.7 She also submits that the Adjudicating Authority has passed the impugned order in-defiance to principle of judicial disciplines as in the identical case of M/s Modern Bricks & Engg. Works, Derabassi, the appeal of the party has been allowed by the Appellate Authority vide O-I-A No. 137-138/CE/Appl/Chd-II/2013 dt. 05.04.2013; copy of the said O-I-A has been furnished and said order has been accepted by the Revenue. Similarly, on the identical issue, the Appellate Authority allowed the appeal of the appellant in the case of M/s Bharat Bricks Co., Village Fatehpur, Derabassi vide O-I-A 7 E/59426/2013, E/50305/2014, E/53902/2014, E/50637/2015 No. 198/CE/Appl/Chd-II/2013 dt. 22.05.2013; copy of the same has been furnished and said order has also been accepted by the Revenue. Further, she submits that in the appellant's own case, this Tribunal has decided the issue in favour of the appellant vide Final Order No. 61382/2016 dt. 16.09.2016. She further submits that the demand for the subsequent period i.e. 01.05.2014 to 31.12.2015 in the appellant's own case, has also been dropped by the Additional Commissioner, Central Excise, Chandigarh-II vide Order-in-Original No. 37-38/CE/2016-17/ADC/CHD-II/SRM dt. 31.03.2017. She further submits that the Hon'ble Supreme Court in the case of Jayaswal's Neco Ltd vs. Commissioner of Central Excise - 2007 (8) STR 305 (SC) has held that the department having accepted principles laid down in earlier case, cannot be permitted to take a contra stand.
4.8 As regards penalty, she submits that as there is no mens-rea, penalty cannot be imposed because the issue relates to interpretation and earlier, this Tribunal has decided the appellant's case in their favour vide final order dt. 16.09.2016.
5. On the other hand, the learned Authorized Representative for the Revenue reiterates the findings of the impugned order.
6. We have carefully considered the submissions made by both the parties and perused material on record; and also gone through the decisions relied upon by the appellant. According to us, the issues to be decided in the present case are as under:
8 E/59426/2013, E/50305/2014, E/53902/2014, E/50637/2015
(i) whether the goods manufactured are unglazed ceramic wall tiles classifiable under sub-heading 6907 10 90 as contended by department or burnt clay building bricks/tiles falling under heading 6904 10 00 & Roofing tiles fall under heading 6905 10 00 of Central Excise Tariff Act, 1985 as claimed by appellant?.
(ii) whether SSI exemption under Notification No. 1/2011- CE dt. 01.03.2011 as amended is available to appellant?
7. We find that the issues involved in the present case are no more res integra and have been decided by the Appellate Authority as well as by the Adjudicating Authority and also by this Tribunal in favour of the appellant. In this regard, we may refer to the decision in the case of M/s Modern Bricks & Engg. Works, Derabassi, whereby the Appellate Authority has allowed the appeal of the assessee by vide O-I-A No. 137-138/CE/Appl/Chd-II/2013 dt. 05.04.2013. Similarly, the Appellate Authority allowed the appeal of the appellant in the case of M/s Bharat Bricks Co., Village Fatehpur, Derabassi vide O-I-A No. 198/CE/Appl/Chd-II/2013 dt. 22.05.2013. Further, we find that the Tribunal vide Final Order No. 61382/2016 dt. 16.09.2016 in the appellant's own case, has allowed the appeal of the appellant. We also find that the demand for the subsequent period i.e. 01.05.2014 to 31.12.2015, in the appellant's own case, has also been dropped by the Additional Commissioner, Central Excise, Chandigarh-II vide Order-in-Original 9 E/59426/2013, E/50305/2014, E/53902/2014, E/50637/2015 No. 37-38/CE/2016-17/ADC/CHD-II/SRM dt. 31.03.2017. All these orders passed by the various departmental authorities as well as the Tribunal have been accepted by the Revenue.
8. In view of our above discussion, we are of the considered opinion that the impugned orders are not sustainable in law and therefore, we set aside the same by allowing all the four appeals of the appellant with consequential relief, if any, as per law.
(Operative part of the order pronounced in the open court) (S. S. GARG) MEMBER (JUDICIAL) (P. ANJANI KUMAR) MEMBER (TECHNICAL) RA_Saifi